The Big Winner in the Budget Deal

“Whenever a fellow tells me he is bipartisan,” said Harry Truman, “I know he is going to vote against me.”

The hosannas to bipartisanship accompanying the budget deal passed this week should have served as fair warning to the rest of us that we lost this vote. True, politicians and commentators vied to hail the sacrifices that had been made on both sides of the aisle for the greater cause of “restoring public faith in the budget process” and thereby bolster Congress‘ poll ratings.

In reality, there was one clear winner: the bipartisan defense lobby, a category that does not apparently include wounded veterans, who must give up some of their pensions for the sake of restoring that public faith, not to mention funding the extra $22 billion for defense that will flow inexorably into the pockets of Lockheed (stock already up 55% this year), Raytheon (up 54%), Northrop (up 64%) and their peers. With the hearty endorsement of both parties, they have emerged triumphant from the budget wars at the expense of old-fashioned special interests such as veterans, the poor, the unemployed, children (57,000 kicked off Head Start) and the aged.

Thus, while some sequestered nondefense cuts have theoretically been restored, federal employees get soaked for higher pension contributions, military veterans (including the wounded) lose part of their projected raises, airline passengers have to fork out higher taxes — a total of $26 billion. Including the “savings” from not extending unemployment benefits ($25 billion), the nondefense sector suffers a net loss of $20 billion.

Meanwhile, as the lopsided House vote in favor of the deal showed, former contenders for the Republican congressional soul, such as deficit purists and entitlement hawks, have been crushed.

This has not happened by accident. Commenting on his colleagues from the defense industry, a lobbyist for an unrelated cause remarked to me this week: “You see them everywhere these days. Normally different sectors, like healthcare or banking, will have their own separate fundraisers, so you get the pharmaceuticals lobbyists at healthcare and so on. But lately I’ve been seeing the people from Lockheed, Raytheon and the rest at all of them, and it doesn’t matter whether the money is for Republicans or Democrats. This whole budget debate has really been about getting defense out from under the sequester.”

Even before Sen. Patty Murray (D-Wash.) and Rep. Paul D. Ryan (R-Wis.) announced their happy agreement, the sustained offensive on the hearts, minds and pockets of legislators had been bearing fruit. Last January’s no-less-bipartisan “fiscal cliff” deal effectively froze the Pentagon‘s dreaded sequester cuts for 2013, so the military was able to go along on $518 billion. And according to the complicated formula prescribed by the 2011 Budget Control Act, the broader defense budget (which includes nuclear weapons programs handled by the Energy Department and other security programs) would have taken a larger sequestration hit in 2014, sinking to a mere $498 billion.

Bear in mind that although this looks like a big drop from the staggering sums apportioned to the military in the early Obama years, it would merely bring Pentagon spending back to the levels of 2007 (allowing for inflation), when we were fully embroiled in Iraq while holding our own in Afghanistan. Nevertheless, the halls of Congress rang with lamentations about the impending “hollowing out of the military.”

Thanks to this week’s budget deal, this grim fate has been averted, so Pentagon spending in 2014 will be at least $520 billion. A qualifier is required because this figure does not include the additional $90 billion unmentioned in the deal that will be provided to service “Overseas Contingency Operations,” meaning the wars that have been funded this way, as if they were an annual surprise, throughout this century. (Thanks to the ongoing privatization of our combat operations support services, contractors now have a big stake in wars continuing, whereas formerly they cared mainly about selling weapons — a peacetime pursuit.)

Assuming that there are no further bipartisan accords — a big assumption — defense spending is due to descend gracefully to $500 billion by 2016 and remain at that level, with adjustments for inflation, into the next decade. However, since the Pentagon has its own, and unsurprisingly generous, formula for calculating inflation, we should not be surprised if the numbers turn out larger than that.

Defense commentators have hailed the agreement as bringing “clarity” to military planning. They are certainly correct about that. We most certainly can see clearly now who is really in charge.